(2008-05-31) Klein Chinas Allseeing Eye

Naomi Klein: China's All-Seeing Eye. With the help of U.S. defense contractors, China is building the prototype for a high-tech police state. It is ready for export.

Thirty years ago, the city of Shenzhen didn't exist

That was before the Communist Party chose it — thanks to its location close to Hong Kong's port — to be China's first "special economic zone," one of only four areas where capitalism would be permitted on a trial basis

Today, Shenzhen is a city of 12.4 million people, and there is a good chance that at least half of everything you own was made here: iPods, laptops, sneakers, flatscreen TVs, cellphones, jeans, maybe your desk chair, possibly your car and almost certainly your printer.

the people of Shenzhen, who are busily putting on a 24-hour-a-day show called "America" — a pirated version of the original, only with flashier design, higher profits and less complaining. This has not happened by accident. China today, epitomized by Shenzhen's transition from mud to megacity in 30 years, represents a new way to organize society. Sometimes called "market Stalinism,"

it is a potent hybrid of the most powerful political tools of authoritarian communism — central planning, merciless repression, constant surveillance — harnessed to advance the goals of global capitalism.

Now, as China prepares to showcase its economic advances during the upcoming Olympics in Beijing, Shenzhen is once again serving as a laboratory, a testing ground for the next phase of this vast social experiment. Over the past two years, some 200,000 surveillance cameras have been installed throughout the city. Many are in public spaces, disguised as lampposts. The closed-circuit TV cameras will soon be connected to a single, nationwide network

a project driven in part by U.S. technology and investment

The security cameras are just one part of a much broader high-tech surveillance and censorship program known in China as "Golden Shield." The end goal is to use the latest people-tracking technology — thoughtfully supplied by American giants like IBM, Honeywell and General Electric.

Like everything else assembled in China with American parts, Police State 2.0 is ready for export to a neighborhood near you.

The workers at FSAN don't just make surveillance cameras; they are constantly watched by them.

enable the cameras to alert police when an unusual number of people begin to gather at any given location.

In 2006, the Chinese government mandated that all Internet cafes (as well as restaurants and other "entertainment" venues) install video cameras with direct feeds to their local police stations. Part of a wider surveillance project known as "Safe Cities," the effort now encompasses 660 municipalities in China.

"The big picture," Zhang tells me in his office at the factory, "is integration." That means linking cameras with other forms of surveillance: the Internet, phones, facial-recognition software and GPS monitoring.

This is how this Golden Shield will work: Chinese citizens will be watched around the clock through networked CCTV cameras and remote monitoring of computers. They will be listened to on their phone calls, monitored by digital voice-recognition technologies. Their Internet access will be aggressively limited

linked to their holder's personal data. This is the most important element of all: linking all these tools together in a massive, searchable database of names, photos, residency information, work history and biometric data. When Golden Shield is finished, there will be a photo in those databases for every person in China: 1.3 billion faces.

Once the tests are done and it's proven, they will be spreading from the big province to the cities, even to the rural farmland."

When the Tibetan capital of Lhasa was set alight in March, the world caught a glimpse of the rage that lies just under the surface in many parts of China. And though the Lhasa riots stood out for their ethnic focus and their intensity, protests across China are often shockingly militant. In July 2006, workers at a factory near Shenzhen expressed their displeasure over paltry pay by overturning cars, smashing computers and opening fire hydrants.

China has seen levels of political unrest in recent years unknown since 1989, the year student protests were crushed with tanks in Tiananmen Square.

This increased unrest — a process aided by access to cellphones and the Internet — represents more than a security problem for the leaders in Beijing. It threatens their whole model of command-and-control capitalism

Every rural village that is successfully razed to make way for a new project creates more displaced people who join the ranks of the roughly 130 million migrants roaming the country looking for work. By 2025, it is projected that this "floating" population will swell to more than 350 million.

But while China's cities need these displaced laborers to work in factories and on construction sites, they are unwilling to offer them the same benefits as permanent residents: highly subsidized education and health care, as well as other public services

The answer is Golden Shield. When Tibet erupted in protests recently, the surveillance system was thrown into its first live test, with every supposedly liberating tool of the Information Age — cellphones, satellite television, the Internet — transformed into a method of repression and control.

Tibetan monks complain that cameras — activated by motion sensors — have invaded their monasteries and prayer rooms.

During the Lhasa riots, police on the scene augmented the footage from the CCTVs with their own video cameras, choosing to film — rather than stop — the violence, which left 19 dead. The police then quickly cut together the surveillance shots that made the Tibetans look most vicious — beating Chinese bystanders, torching shops, ripping metal sheeting off banks — and created a kind of copumentary: Tibetans Gone Wild.

The flare-up in Tibet, weeks before the Olympic torch began its global journey, has been described repeatedly in the international press as a "nightmare" for Beijing

But inside China, the Tibet debacle may actually have been a boon to the party, strengthening its grip on power

the party demonstrated that it could still control what they hear and see. And what they saw on their TVs and computer screens were violent Tibetans, out to kill their Chinese neighbors, while police showed admirable restraint

Chinese viewers also saw a world unsympathetic to the Chinese victims of Tibetan violence, so hostile to their country that it used a national tragedy to try to rob them of their hard-won Olympic glory. These nationalist sentiments freed up Beijing to go on a full-fledged witch hunt

when the games begin, much of the Tibetan movement will be safely behind bars — along with scores of Chinese journalists, bloggers and human-rights defenders who have also been trapped in the government's high-tech web.

*In Guangzhou, an hour and a half by train from Shenzhen, Yao Ruoguang is preparing for a major test of his own. "It's called the 10-million-faces test," he tells me.

Yao is managing director of Pixel Solutions, a Chinese company*

When I meet Yao at his corporate headquarters, he is feeling confident about how his company will perform in the test. His secret weapon is that he will be using facial-recognition software purchased from L-1 Identity Solutions, a major U.S. defense contractor that produces passports and biometric security systems for the U.S. government.

We have to be able to match a face in a 10 million database in one second," Yao tells me. "We are preparing for that now."

Like many other security executives I interviewed in China, Yao denies that a primary use of the technology he is selling is to hunt down political activists. "Ninety-five percent," he insists, "is just for regular safety."

Based in Connecticut, L-1 was created two years ago out of the mergers and buyouts of half a dozen major players in the biometrics field, all of which specialized in the science of identifying people through distinct physical traits: fingerprints, irises, face geometry

Thanks to board members like former CIA director George Tenet, the company rapidly became a homeland-security heavy hitter. L-1 projects its annual revenues will hit $1 billion by 2011, much of it from U.S. government contracts.

As proud as Yao is to be L-1's Chinese licensee, L-1 appears to be distinctly less proud of its association with Yao. On its Website and in its reports to investors, L-1 boasts of contracts and negotiations with governments from Panama and Saudi Arabia to Mexico and Turkey

*After leaving a message with the company inquiring about L-1's involvement in China's homeland-security market, I get a call back from Doni Fordyce, vice president of corporate communications. She has consulted Joseph Atick, the company's head of research. "We have nothing in China," she tells me. "Nothing, absolutely nothing. We are uninvolved. We really don't have any relationships at all."

I tell Fordyce about Yao, the 10-million test, the money he paid for the software license. She'll call me right back. When she does, 20 minutes later, it is with this news: "Absolutely, we've sold testing SDKs [software development kits] to Pixel Solutions and to others [in China] that may be entering a test." Yao's use of the technology, she said, is "within his license" purchased from L-1.*

the relationship between Yao and L-1 may well be illegal under U.S. law. After the Chinese government sent tanks into Tiananmen Square in 1989, Congress passed legislation barring U.S. companies from selling any products in China that have to do with "crime control or detection instruments or equipment."

"The intent of that act," a congressional staff member with considerable China experience tells me, "was to keep U.S. companies out of the business of helping the Chinese police conduct their business, which might ultimately end up as it did in 1989 in the suppression of human rights and democracy in China."

Yao has been working intimately with Chinese national-security forces, syncing L-1's software to their vast database, a process that took a week of intensive work in Beijing. During that time, Yao says, he was on the phone "every day" with L-1, getting its help adapting the technology. "Because we are representing them," he says. "We took the test on their behalf."

Few companies have collected as much sensitive information about U.S. citizens and visitors to America as L-1: It boasts a database of 60 million records, and it "captures" more than a million new fingerprints every year. Here is a small sample of what the company does: produces passports and passport cards for American citizens; takes finger scans of visitors to the U.S. under the Department of Homeland Security's massive U.S.-Visit program; equips U.S. soldiers in Iraq and Afghanistan with "mobile iris and multimodal devices" so they can collect biometric data in the field; maintains the State Department's "largest facial-recognition database system"; and produces driver's licenses in Illinois, Montana and North Carolina

It is L-1's deep integration with multiple U.S. government agencies that makes its dealings in China so interesting: It isn't just L-1 that is potentially helping the Chinese police to nab political dissidents, it's U.S. taxpayers. The technology that Yao purchased for just a few thousand dollars is the result of Defense Department research grants and contracts going as far back as 1994

According to the congressional staff member, American companies and their lobbyists are applying "enormous pressure to open the floodgates."

The crackdown in Tibet has set off a wave of righteous rallies and boycott calls. But it sidesteps the uncomfortable fact that much of China's powerful surveillance state is already being built with U.S. and European technology

The issue came up again during the recent Tibet uproar when it was discovered that both MSN and Yahoo had briefly put up the mug shots of the "most wanted" Tibetan protesters on their Chinese news portals.

In all of these cases, U.S. multinationals have offered the same defense: Cooperating with draconian demands to turn in customers and censor material is, unfortunately, the price of doing business in China. Some, like Google, have argued that despite having to limit access to the Internet, they are contributing to an overall increase of freedom in China.

IBM, meanwhile, is installing its "Smart Surveillance System" in the capital, another system for linking video cameras and scanning for trouble, while United Technologies is in Guangzhou, helping to customize a "2,000-camera network in a single large neighborhood, the first step toward a citywide network of 250,000 cameras to be installed before the Asian Games in 2010."

While U.S. companies are eager to break into China's rapidly expanding market, every Chinese security firm I come across in the Pearl River Delta is hatching some kind of plan to break into the U.S. market. No one, however, is quite as eager as Aebell Electrical Technology, one of China's top 10 security companies

One of the first people to sound the alarm on China's upgraded police state was a British researcher named Greg Walton. In 2000, Walton was commissioned by the respected human-rights organization Rights & Democracy to investigate the ways in which Chinese security forces were harnessing the tools of the Information Age to curtail free speech and monitor political activists. The paper he produced was called "China's Golden Shield: Corporations and the Development of Surveillance Technology in the People's Republic of China."

It exposed how big-name tech companies like Nortel and Cisco were helping the Chinese government to construct "a gigantic online database with an all-encompassing surveillance network

The revelation that China was constructing a gigantic digital database capable of watching its citizens on the streets and online, listening to their phone calls and tracking their consumer purchases sparked neither shock nor outrage. Instead, Walton says, the paper was "mined for ideas" by the U.S. government, as well as by private companies hoping to grab a piece of the suddenly booming market in spy tools.

For Walton, the most chilling moment came when the Defense Department tried to launch a system called Total Information Awareness to build what it called a "virtual, centralized grand database" that would create constantly updated electronic dossiers on every citizen, drawing on banking, credit-card, library and phone records, as well as footage from surveillance cameras

Among those aggressively vying to be part of this new security boom was Joseph Atick, now an executive at L-1. The name he chose for his plan to integrate facial-recognition software into a vast security network was uncomfortably close to the surveillance system being constructed in China: "Operation Noble Shield."

New York, Chicago and Washington, D.C., are all experimenting with linking surveillance cameras into a single citywide network. Police use of surveillance cameras at peaceful demonstrations is now routine, and the images collected can be mined for "face prints," then cross-checked with ever-expanding photo databases.

"I can guarantee you that there are people in the Bush administration who are studying the use of surveillance technologies being developed here and have at least skeletal plans to implement them at home," he says. "We can already see it in New York with CCTV cameras. Once you have the cameras in place, you have the infrastructure for a powerful tracking system. I'm worried about what this will mean if the U.S. government goes totalitarian and starts employing these technologies more than they are already. I'm worried about the threat this poses to American democracy."

Herrington pauses. "George W. Bush," he adds, "would do what they are doing here in a heartbeat if he could."

as soon as I get to the customs line at JFK, watching hundreds of visitors line up to have their pictures taken and fingers scanned. In the terminal, someone hands me a brochure for "Fly Clear." All I need to do is have my fingerprints and irises scanned, and I can get a Clear card with a biometric chip that will let me sail through security. Later, I look it up: The company providing the technology is L-1.